Gift Card Solutions And Best Practices For Franchises

Most often, gift card programs are profitable for franchises that provide lower-cost, volume products such as retailers or foodservice providers. Below are things to consider if you plan to implement a gift card solution – or want to improve your existing gift card program.

Gift cards – How they benefit franchises.

  • Increase sales
  • Strengthen the brand and customer loyalty
  • Provide system-wide consistency for promotions and service
  • Encourage consumers to patronize stores across the system
  • Make it easier to partner with companies, schools and nonprofits due to store count/convenience

Execution – Issues to consider.

Gift card programs are a group effort where responsibility resides with marketing to promote, operations to redeem and manage, and finance to account for.

  • Create a “gift card council” or make gift cards part of the franchise advisory committees’ management responsibilities.
  • Create a gift card ROI to include sales projections and costs:
  • Transaction fees – FREE with Vantiv Integrated Payments when you process credit
  • Hardware – Vantiv may already be integrated with your POS
  • Card design and printing – card design is free at Vantiv
  • Consider various card designs – birthday, holiday, just because/love, celebrations, graduation, and thank yous
  • Consider how to require that all franchisees participate in a gift card program
  • Determine how to manage fund transfers/ACH – store-to-store or corporate pooling
  • Use co-op marketing/advertising funds to promote gift cards just like you would any other product
  • Consider the fund as a resource to set up the program (card design, hardware/software)
  • Franchisor can provide incentives to participate by providing the hardware/software free of charge to the franchisee
  • Consider central buying to get the best price on gift cards

Cautions – Consult your legal counsel.

Because gift card laws vary from state to state, we recommend you consult with your legal counsel to manage potential breakage, expiration dates, and abide by escheat and gift card laws for the state(s) you serve. Other considerations include:

  • Royalty to the franchisor (typically the same for gift cards as any other sale)
  • Changes to training manuals, franchise agreements, and disclosure documents
  • Policy considerations (defined by legal and gift card council or franchise advisory committee):
  • Replacement card policy and procedure (for example, if a card is rendered ineffective because the magnetic strip is damaged)
  • Minimum card load amounts for activation
  • Policy regarding lost or stolen gift cards
  • Instructions regarding ordering new card supplies
  • Policy regarding changes to gift card system (notice of change to franchisee, if change is optional or mandatory, timeline, cost of change)

Marketing – Continually promote gift cards.

To have a successful gift card program, treat gift cards like a product line, not an afterthought.

  • Use traditional, digital and social advertising to keep gift cards top-of-mind
  • Promote from both corporate and franchisee locations
  • If your business is a restaurant, take gift cards to your catering events and local celebrations
  • Sell online so anyone can buy and send or email your gift cards
  • Vantiv’s StoreCard™ enables you to sell gift cards online, and go mobile.

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